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Equal treatment for agency workers

19 March 2018

The Employment Appeals Tribunal (EAT) ruled that higher pay does not compensate for shortfalls in agency workers’ entitlement to annual leave and rest breaks.

The recent case of Kocur v Royal Mail Group Ltd and Angard Staffing Solution Ltd dealt with the equal treatment of an agency worker in relation to holiday pay, rest periods and working hours. The Employment Appeals Tribunal (EAT) ruled that employers should give agency workers the same leave entitlement and pay for rest breaks as permanent employees, even if they receive a higher hourly rate of pay.

Facts

Under Regulation 5 of the Agency Worker Regulations 2010 (AWR), an agency worker who has undertaken the same role - whether on one or more assignments - with the same hirer for 12 continuous weeks is entitled to the same basic working and employment conditions as if they had been directly hired. The relevant terms and conditions to which an agency worker is entitled after completing the 12-week qualifying period includes terms relating to pay, duration of working time, annual leave and rest breaks.

In the case in question, Mr Kocur was employed by Angard Staffing Solutions Limited and was supplied to Royal Mail Group Limited under an agency arrangement. Mr Kocur completed the 12-week qualifying period, and therefore he was entitled to the same basic working and employment conditions as directly recruited employees at Royal Mail under Regulation 5 of the AWR.

Mr Kocur was not happy with some of his terms and conditions, which differed from those of permanent employees at Royal Mail. Mr Kocur was entitled to 28 days annual leave, whereas permanent employees were entitled to 30.5 days. Mr Kocur was also given a one-hour break on night shifts but was only paid for 30 minutes, whereas permanent employees were paid for the full hour.

Mr Kocur brought an Employment Tribunal (ET) claim for breach of Regulation 5 of the AWR in relation to his annual leave and rest break entitlements. Mr Kocur also argued that there had been a breach of ‘duration of working hours’ as he was not given the same weekly contractual hours as someone working directly for Royal Mail.

Employment Tribunal Decision

The ET rejected Mr Kocur’s claims in relation to annual leave and rest breaks, confirming that although it was accepted that there was a disparity of treatment in relation to both, this was compensated for by Mr Kocur’s higher hourly rate as he was paid £10.50 per hour, compared to £9.60 for directly recruited employees. The ET also held that Mr Kocur could have chosen not to work the 2.5 days (annual leave difference) if he had wanted to. Furthermore the ET rejected Mr Kocur’s claim regarding ‘duration of working hours’ because a claim of this sort would go against the essence of agency work.

Employment Appeals Tribunal Decision

Mr Kocur then appealed to the EAT who confirmed that Regulation 5 of the AWR had been breached in respect to both the annual leave and the rest breaks.

In regards to the annual leave, the EAT disagreed with the ET’s statement that the shortfalls in Mr Kocur’s entitlement to annual leave could be compensated for by the payment of a higher hourly rate. The EAT also rejected that a voluntary allocation of leave by the worker (2.5 days) was the same as an ‘entitlement” under Regulation 5.

In respect to the rest breaks, the EAT confirmed that the failure to pay Mr Kocur for the full hour break meant that he was paid just half of what comparable permanent employees were paid. The EAT also confirmed that the fact that Mr Kocur was paid a higher daily rate was not enough to satisfy Regulation 5.

The EAT rejected that Mr Kocur’s entitlement to the same 'duration of working time' entitled him to work precisely the same number of hours as comparable employees. The EAT stated that such a requirement would deprive the relationship between hirer and agency/agency worker of the flexibility considered important by the AWR.

Comment

The case serves as a useful reminder that shortfalls in agency workers’ entitlement for holiday and rest breaks cannot be compensated for by the payment of an enhanced hourly rate. The EAT made it clear that the AWR require a term-by-term approach and that, each term and condition under Regulation 5, for an agency worker who has completed the 12-week qualifying period, should match those of a direct employee or worker.

Interestingly, the EAT stated that, as the AWR do not guide employers on how an agency worker should receive equal treatment, parity can be achieved in different ways. In order to meet the requirements for overall equivalent treatment, if any payment for holiday or rest periods was to be incorporated into hourly pay, this arrangement would have to be transparent and clearly carried out in a way, which ensured the agency worker could readily ascertain how remuneration relates to annual leave and/or rest breaks.

The decision will be binding on employment tribunals, unless it is overturned by a higher court.